A Blog of Members of the Administrative Law and Regulatory Practice Section of the American Bar Association

Tuesday, April 20, 2010

International Coverage of SEC Suit Against Goldman Sachs

While many people may have been focusing just on U.S. media coverage of the SEC's suit against Goldman Sachs, a sampling of the international coverage may be worth noting. In China, the Xinhua News Agency commented that the suit "has again sounded an alarm bell for financial regulation, which may stimulate U.S. authorities to speed up reforms of financial supervision mechanisms." Xinhua also repeated the assertion that "the SEC launched the lawsuit without any advance warning," notwithstanding the Washington Post's reporting that the SEC and Goldman had been in "secret talks" for months about the allegations of fraud and that "SEC lawyers had told Goldman in writing they were prepared to file a federal suit."

In the United Kingdom, the Independent focused on the fact that Goldman, even as it resists the SEC's charges, "earned a record $3.46bn (£2.25bn) in the first three months of the year, and was bringing in revenues at the rate of $1m every 10 minutes." The Financial Times repeated Goldman's statement that "[q]uarterly net income and revenue surged, . . . driven by a 'diversified business model' that showed few weak spots during the period." Meanwhile, several U.K. newspapers such as the Telegraph reported that the Financial Services Authority, the U.K. financial regulator, has started a formal investigation into Goldman Sachs in relation to the SEC's fraud charges.

In Australia, the Sydney Morning Herald ran the AFP article that, like the Independent, juxtaposed Goldman's record earnings with the fraud allegations. The Australian reported that Australian executives of Goldman Sachs met voluntarily with Australian Securities & Investments Commission officials to brief them about the suit and told "staff and clients that the Australian operations were not involved in the alleged investment fraud."